With Monday’s House vote, legislature has approved Lockheed tax-exemption bill

Montgomery delegation split in both chambers

This story was corrected at 6 p.m. April 8, 2013. An explanation follows.

Despite objection from the Montgomery County Council, the Maryland General Assembly on Monday passed a bill that will exempt defense firm Lockheed Martin from $450,000 in county hotel taxes.

The bill exempts corporate training centers from hotel rental tax, if those facilities only rent rooms to employees and are not open to the general public. The only such facility is Lockheed Martin’s Center for Leadership Excellence in Bethesda.

The Senate passed the bill, 37-9, three weeks ago. The House vote Monday was 102-35.

Before the House vote was final, 12 members of the Montgomery House delegation were in favor, 11 opposed, and one didn’t vote. That was before a few delegates in the House changed their votes; it’s not clear if any were from Montgomery.

When the Senate voted last month, five Montgomery senators were in favor, and three were opposed.

The Montgomery County Council opposed the bill. Councilman George Leventhal (D-At Large) said it usurps home rule, preventing county officials from determining which taxes are appropriate to levy on businesses in their jurisdiction. There are costs associated with having businesses and facilities in the county, he said.

In 2010, the General Assembly exempted corporate training centers from state sales tax. This year’s local tax bill follows up on that exemption,

County Executive Isiah Leggett (D) has attempted twice in the past to reimburse the company for past taxes but was thwarted by the council.

The bill was supported by the Montgomery County Chamber of Commerce, the governor and the Department of Business and Economic Development because they say Maryland will be seen as more business-friendly, and other firms could locate their headquarters in the state.

Other organizations, including some unions and Progressive Maryland, have called the bill corporate welfare.

Montgomery County’s 7 percent hotel tax brings in about $19 million each year. About $450,000 of that comes from Lockheed’s 180-room facility.